The German housing market has been remarkably strong over the past few years and is considered stable in the long run. How is this German housing market different from Korea’s?
Unlike Korean market, which housing is rather considered as a market product, the biggest feature of the German housing system is the active rental market. The German self-ownership rate is about 50%, the lowest among European countries after Switzerland.
This is the result of the integration of historical factors such as the implementation of the rental management law after World War II, policy factors such as strong tenant rights protection system due to the government’s active housing policy intervention, and cultural factors of Germans who are more inclined to avoid risks.
Although there is a market tendency to prefer rental to home ownership, the German government is implementing a policy of providing some subsidies to encourage home purchases, especially for families with children. This includes low-interest loans and subsidies to help pay down payments.
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